The formula for Profitability Index is simple and it is calculated by dividing the present value of all the future cash flows of the project by the initial investment in the project.

Nov 15, 2024 · Present value of future cash flows / the initial investment = profitability index. Or. (Net present value + initial investment) / initial investment – profitability index. To find more attractive …

What is the Profitability Index? The Profitability Index (PI) measures the ratio between the present value of future cash flows and the initial investment. The index is a useful tool for ranking investment …

Jun 16, 2025 · Businesses use PI to determine if a proposed project will be a worthwhile investment. The profitability index (PI) measures the attractiveness of a project or investment. The PI is …

Profitability index calculator helps you decide and compare the potential profitability or viability of an investment or project.

This free tool helps you calculate the profitability index (PI) or profit investment ratio (PIR) based on the amount of your investment, the discount rate, and the number of years

Running a profitable business demands a lot of investments and assessing them for profitability is essential. The profitability index (PI), also known as profit investment ratio (PIR) is a method to …

May 8, 2025 · The Profitability Index (PI) is a key financial metric used to evaluate investment projects. It tells you how much value you’ll receive for every dollar invested — making it a favorite among …

Oct 3, 2023 · How to Calculate Profitability Index? The profitability index (PI) is a tool to measure the monetary benefits (i.e. cash inflows) received for each dollar invested (i.e. cash outflow), with the …

Dec 4, 2024 · Investors and financial analysts often rely on the profitability index (PI) to determine whether the benefits of an investment opportunity outweigh its costs. Essentially, the PI compares …